The trends we've cited in previous calls in terms of customer shopping patterns held true in the first quarter with customer shopping episodically, while gravitating towards the value offerings in our assortment along with new and innovative items. What was encouraging was that we saw sequential improvement throughout the quarter, with April being the best month of Q1. The second quarter represents a good opportunity for us to show continued improvement with several natural shopping events still ahead of us, such as Father's Day, Fourth of July, and the beginning of Back to School. Beneath the surface, our .com business posted an 8% sales increase over last year and comprised 9% of total merchandise sales versus 8.2% last year. BOPIS and ship-from-store represented more than 80% of total .com sales for Q1, which highlights the true omni-channel approach that we've taken to growing this business.

As you know, one of our long-range plan goals is to build a more powerful omni-channel business. We are focused on engaging as many customers as possible across all of our channels because we know that an omni-channel shopper is our most valuable customer. They shop more frequently, they spend more per transaction, and are worth three to four times more in sales per year than a non-omnichannel customer. In terms of sales performance across our different divisions, the hard good side of the business performed the best during the quarter on a non-shifted basis. Our strongest category within hard goods remains the outdoor division which ran a 2% increase. Camping continues to run significant gains driven by Stanley and YETI. The strong field trend we saw on Q4 slowed down a little bit in Q1.

We expect this business to activate later in the year. The hunting and fishing categories remain key differentiators for us, and both businesses are in the best inventory position we've been in over the past four years, which sets us up well heading into the summer months for fishing and in the fall for hunting season. The other portion of the business that we categorize as hard goods is sports and recreation which ran down 4%. We saw strong performance in this division in team sports which was led by continued growth in pickleball. It also includes our outdoor cooking category, which has been a strong suit for us over the past couple years, but had a challenging quarter, primarily driven by a crawfish shortage, to suppress sales across the entire Gulf region.

We have seen this business rebound as we exited crawfish cooking season and people started preparing for summer outdoor grilling. To help capitalize on this, we also have a strong marketing plan for the summer to ensure we grow our market share. We offer the broadest and most holistic assortment in the marketplace across cooking types and surfaces, Spices and Rubs, accessories, and premium fuels, making it another key differentiator and traffic driver for Academy. The most challenged business in sports and recreation remains fitness, where we continue to see softness in cardio equipment. We'll talk about some plans to help improve this business a little bit later in my remarks. On the soft good side of the business, footwear sales were down slightly at negative 1%, which was a solid improvement over our Q4 trend.

Athletic footwear had the strongest performance for the quarter, driven by increases in performance running brands such as Nike, Brooks, and New Balance. Casual footwear is the second best performing category with strong sales in Birkenstock's, Crocs and Skechers, driven by slip-ins. We continue to partner with our existing footwear brands to gain expanded access to the innovation pipelines so we can ensure our customers have access to the new styles. At the same time, we continue to work with relevant brands to gain access to items and categories that are not already part of our current assortment. Apparel sales were down 3% for the quarter. Within this division, our kids and outdoor apparel businesses were the top performers. We continue to see strong results from key national brands, which is Nike, Carhartt, and Levi's, while also seeing solid growth in some of our newer private brands such as Freely and R.O.W. Licensed apparel was the weakest segment of the business as we were lapping the release of the commemorative Astros World Series jerseys that launched last spring, along with the LSU Women's Basketball National Championship from last year.

That being said, the majority of this business for us is done during the fall, and the team has done a lot of great work around editing the assortment, the position as well for the kickoff to college and pro football later this year. From a profitability standpoint, our gross margin rate came in at 33.4% for the quarter for a 40 basis point decline versus last year, primarily driven by an 80 basis point decline in merchandise margins. The merchandise margin decline versus last year is primarily caused by sales mixing into lower margin hard goods businesses coupled with some planned extra promotional activity this year. We remain on track to achieve our full year gross margin rate guidance of 34.3% to 34.7%. Carl will discuss our possibility performance in more detail in his comments later in the call.

As we forecast sales out for the remainder of the year, we expect that our customer base will remain under pressure and continue to moderate their spending. To combat this, we're leaning into the shopping trends that customers clearly demonstrated over the past year, while also focusing on our long-range plan initiatives. In regards to customer behavior, there are three primary sales drivers. Newness, value, and driving traffic during the key time periods on the calendar. In terms of newness, we continue to look for emerging and innovative brands to add to our assortment as another way to spark customer interest and drive traffic and sales. Several of the new brands that we've added to the assortment over the last year, such as Birkenstock, NordicTrack and Fitness, and [indiscernible] Apparel, will be available in an expanded number of stores this year.

We also continue to bring in well-known brands that previously weren't part of our assortment, such as Altra Trail Running Shoes or Choco sandals. In order to highlight our value offering, another place we've added newness is in our private brand portfolio, where we recently launched MacGregor Golf as a brick and mortar exclusive for Academy. Initially, we're leaning into golf balls and club sets, but similar to Redfield on the outdoor side of the business, we think there are category expansion opportunities down the road. The last way we're leveraging newness is to jumpstart sales and lag in categories. I mentioned earlier in my comments about the continued softness in the fitness business, and our plan is to lean into newness and innovation as a way to help spark this business.

The first focus is to re-energize our cardio equipment assortment by capitalizing on emerging trends while also leaning into value with items such as walking pads, which are essentially a simplified treadmill that works well for people who use standing desks or want a low impact aerobic workout at home. Another addition is taking advantage of the CrossFit trend by being the first retailer to add a salt fitness to our brick and mortar assortment. They're a digitally native brand that is well known and respected within the CrossFit community. Finally, within cardio, as I briefly mentioned earlier, we're expanding our NordicTrack Assortment out to all doors with additional styles. Another growing fitness trend is focused on recovery, where we're expanding into cold therapy with offerings from LifePro and Hyperice.

Sports and nutrition is the third leg of the stool, with several new brands launching in our stores, including Jocko and Podium. On the value front, we continue to ramp up our focus by distorting the products, brands, and categories we have clearly defined everyday value leadership on key private and national brand items. You'll see these items heavily featured in marketing and prominently positioned and signed in our stores and on our website. While we remain firmly committed to our everyday pricing model, we will also use promotions on seasonal categories as a way to take advantage of customers' episodic shopping patterns and drive traffic during the key milestones in the calendar. As I mentioned earlier, we have several natural shopping events on the calendar in the second quarter, including Memorial Day, Father's Day, 4th of July, and the kickoff to back-to-school and football season.

We have a strong slate of promotions focused into this time period with an emphasis on key summer categories such as grilling, patio furniture, pools, and fishing to help ensure we win the driveway decision. We also have several initiatives that are incorporated again to our long-range plan strategies, which we expect to start paying dividends as we progress through the year. Opening new stores remains the number one growth driver for us. As we previously guided, in 2024 we plan to open up 15 to 17 new stores. During the quarter, we open up two new stores, with the first one in Knightdale, North Carolina, which is right outside of Raleigh, and the second in Greenwood, Indiana, which is south of Indianapolis. We're excited that just a couple of weeks ago, we opened up our third new store for this year in Zanesville, Ohio, expanding our presence from 18 to 19 states and our store count to 285.

The remaining 12 to 14 stores will open up in the second half of the year with a good balance of locations between new and existing markets. During the first quarter, our 22 vintage and new stores ran positive comps. While the 2023 vintage is not currently in the comp base, they are tracking to higher year one volume levels than that of the 22 vintage. Our expectation is that the 2024 stores will be even stronger. Our second core strategy is to grow our .com business to 15% penetration over the next five years. As I mentioned earlier, our sales in this channel are off to a strong start in Q1. This is the second consecutive quarter of positive comps for the .com business. Our core focuses on this front are to streamline and elevate the Omni-channel shopping experience, offer expanded assortments online, and improve our fulfillment speed.

One key capability that will go live as we head into the remainder of the year is the ability to offer same-day delivery for many of our products. We've partnered with DoorDash to help us deliver this new level of same-day fulfillment. We'll launch this capability across our entire footprint, as we head into back to school. Initially, customers will be able to order Academy products through the DoorDash app. The next phase will be to integrate this functionality into our site so that customers can choose same day delivery as another fulfillment option. We believe that this added capability will help us reach new customers through the DoorDash app and drive incremental sales. This new service, coupled with our strong [focus] (ph) offering, where we will focus on one hour fulfillment guarantee, helps further simplify our customer shopping experience and better enable them to have fun out there in all of their sports and outdoor activities.

Another focus under the strategy is all the work you've heard speak to in prior calls from driving a deeper connection with our customer through the use of data and analytics. Over the summer, we plan to launch our first ever loyalty program, which will be branded as My Academy. To be clear, our Academy credit card will remain our primary loyalty tool, with 5% off every purchase being the cornerstone of the value proposition. That being said, we have many customers who don't either qualify for the card or choose not to apply. So we plan to expand how we engage with non-academy credit card customers through My Academy. The goal is to reduce and/or eliminate friction for a loyalist while also expanding their buying power by offering targeted offers and promotions.

The elements of My Academy will include a welcome offer of 10% off your next purchase of up to $200, free shipping on purchases over $25 versus $50 for people who aren't in the program, faster checkout for both online and in our app, insider access to personalized offers, deals and products, and a birthday reward. Over time, as we test new features and benefits, our plan is to integrate the ones that resonate with our customers into this loyalty program. At this point, our plan is to have the program fully rolled out prior to back to school. Another one of our long-range plan initiatives is to leverage and scale our supply chain. The implementation of our new warehouse management system is one of several supply chain initiatives. We should see increased productivity and service levels out of our Georgia distribution center as we move forward now that it has gone live.

Our management team has collectively been through many of these transitions at other companies and we are all pleased at how smoothly the change over to the new WMS is gone. As a reminder, the implementation of a lot of this system is foundational to us achieving our new store growth targets that we outlined in our long-range plan. This is the first of our three DCs that we will be converting over to the Manhattan WMS. While we can't control the economy, we can control how we deliver value and newness for customers on a regular basis. We can also control how we engage with our customer through marketing and the service levels we provide, along with how we execute against the pillars of our long-range plan. And that is what we're going to remain focused on.

With that, I'll turn it over to Carl, who'll give you a deeper dive into our Q1 financials. Carl?

Carl Ford : Thanks, Steve. Good morning, everyone. Our top-line in the first quarter did not meet our expectations. Given this, we worked to manage our inventory levels and control our operating costs, resulting in Academy generating $200 million in cash from operations during the quarter. Now let's walk through the details of our first quarter results. Net sales came in at $1.36 billion, a 1.4% decline compared to the first quarter of last year with a comp of negative 5.7%. Our comp ticket size decreased by 1% while comp transactions declined by 5%. Our omnichannel sales were 9% of total merchandise sales compared to 8.2% in the first quarter of 2023. The investments we have made over the past couple of years upgrading the technical aspects of our website and the connectivity to the stores have solidified the backend infrastructure to improve the customer checkout experience.

We are now focused on investing in new customer acquisition and driving more traffic to the site. The gross margin rate in the first quarter was 33.4%, a 40 basis point decrease compared to Q1 of last year. Merchandise margins declined by 80 basis points primarily due to a higher sales mix of hard goods and more promotional activity versus last year. This decline was partially offset by a 40 basis point improvement in freight costs and a 20 basis point improvement in shrink compared to Q1 of last year. We remain on track to achieve our full year gross margin guidance of 34.3% to 34.7%. Our SG&A dollars as a percentage of sales increased by 130 basis points or $12.5 million compared to Q1 of last year. We deleveraged 30 basis points on existing store operations, primarily due to the decline in sales volume.

The other 100 basis points of deleverage was a result of Academy investing in its primary growth initiatives, opening new stores, growing Omnichannel, scaling and leveraging our customer data platform, and modernizing our supply chain. We believe in our long-range plan and are committed to investing in it, while also managing our existing cost structure. Overall, in the first quarter, Academy generated net income of $76.5 million and diluted earnings per share of $1.01. Adjusted net income, which excludes stock-based compensation of $6.1 million and $449,000 of deferred loan costs was $81.6 million or $1.08 in adjusted earnings per share. Looking at the balance sheet, we ended the quarter with $378 million in cash. Our inventory balance was $1.36 billion, a decrease of 2% compared to Q1 of 2023.

Total inventory units were down 11%, and this includes having an additional 15 stores compared to the end of Q1 2023. On a per-store basis inventory units were down 11.5%. In terms of capital allocation we continue to execute a balanced capital allocation strategy focused on our three priorities. One, maintaining adequate liquidity for financial stability. Two, self-funding our growth initiatives; and three, increasing shareholder return through share repurchases and dividends. In Q1 we generated approximately $200 million of cash from operations. We invested $32 million in our growth initiatives, repurchased 124 million worth of shares or 2.7% of the total outstanding shares of the company, and paid out $8 million in dividends. We are investing in future growth as well as shareholder value, particularly when it is discounted relative to the company's long-term growth potential.

Academy had $574 million remaining on its share repurchase authorization at the end of Q1. Lastly, a couple of other notes from the quarter. We amended and extended our $1 billion credit facility through March of 2029, and the Board recently approved a dividend of $0.11 per share payable on July 18, 2024, to stockholders of record as of June 20, 2024. Turning to guidance, we expect the economic environment to remain challenging. Therefore, we will continue to efficiently run the business, while also making investments to support our long-term strategic opportunities. We are reiterating our previous sales and net income guidance for fiscal 2024, while updating our EPS forecast to reflect the shares repurchased in the first quarter. Net sales are still expected to range from $6.07 billion to $6.35 billion with comparable sales of negative 4% to positive 1%.

Our gross margin rate is still expected to range from 34.3% to 34.7% and GAAP net income between $455 million and $530 million. GAAP diluted earnings are now expected to range from $6.05 per share to $7.05 per share based on a revised share count of approximately 75 million diluted weighted average shares outstanding for the full year. This amount does not include any potential future repurchase activity. SG&A expenses are still expected to be approximately 100 basis points higher than in 2023. As a reminder, SG&A includes stock-based compensation expense of $30 million or approximately $0.30 of earnings per share. We also remain confident in the strength of our cash flows and still expect to generate between $290 million and $375 million of free cash flow, including $225 million to $275 million of capital expenditures.

With that, we will now open it up for questions.

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